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Apr 14, 2023

Eighth Circuit Upholds Ruling that Pension and Welfare Fund Contributions were Properly Made

ABSTRACT: The Greater St. Louis Construction Laborers Welfare Fund, an employee benefit plan, along with three other employee benefit plans, appealed a grant of summary judgment to RoadSafe Traffic Systems, Inc., where the funds’ trustees had claimed that RoadSafe owed them unpaid contributions and supplemental dues and associated penalties, costs, and interest, in violation of ERISA section 515. The Eighth Circuit affirmed the dismissal below. Greater St. Louis Constr. Laborers Welfare Fund v. RoadSafe Traffic Sys., 55 F.4th 609 (8th Cir. 2022).

The Greater St. Louis Construction Laborers Welfare Fund is an employee benefit plan that receives contributions under a collective bargaining agreement with RoadSafe, a provider of traffic safety and pavement marking services and products. There are three other employee benefit fund plaintiffs in this case. They are: Construction Laborers Pension Trust of Greater St. Louis, St. Louis Vacation Trust Fund, and Construction Laborers & Contractors Training Fund of Eastern Missouri.

The collective bargaining agreement required RoadSafe to pay fringe-benefits contributions and supplemental dues for specified types of work by its employees. The funds claimed that an audit of RoadSafe’s payroll indicated that RoadSafe was improperly withholding some contributions from the welfare funds. Namely, they claim that RoadSafe was improperly withholding fringe benefits on so-called “non-reportable” hours. RoadSafe was classifying loading and unloading time as non-reportable hours, along with shop time. RoadSafe argued that it was only required to pay fringe-benefits on time spent working on roads or highways, not in the shop or travel time. Attorneys for the fund argued that because they could not distinguish between shop hours and loading and unloading hours, they considered all hours marked NON on the sheet as hours that benefits should have been paid for.

Background and Factual Information:

The collective bargaining agreement specifically named two categories of work where fringe benefits had to be paid, “Building Construction” and “Highway/Heavy.” RoadSafe was also required to “submit monthly contribution report forms and authorized the Funds to examine payroll and related records to ensure compliance with the CBA's contribution requirements.”

When the fund was audited, the initial findings found $5,974.50 under reported hours, and $3,914.24 in under paid Supplemental Dues. The preliminary report went on to state that shop time was listed as “NON” in the “craft” or “class” columns on the timesheet. Loading and unloading time was also listed as “NON”. Shop time was not covered by the collective bargaining agreement, but loading and unloading time was covered by the collective bargaining agreement. The fund therefore could not determine based solely on the information given what amount of “NON” time should have been reported and what amount of that time was not covered by the CBA, and therefore sued for all hours in that category.

The payroll administrator for RoadSafe responded to requests for more documentation by stating that the only time that was covered by the CBA was time on job sites, and not time spent in the yard, except for the loading and unloading of trucks. No additional proof was submitted to the funds, besides the timecards previously submitted which listed specific tasks that were done during the hours on the time sheet.

Three years after this audit, the funds sent a demand letter. When nothing was paid, they filed this suit, ultimately seeking summary judgment. Defendants cross-filed for summary judgment. When analyzing the motions for summary judgment, the court applied ERISA § 515, which has been interpreted to state that multiemployer fringe benefit funds “may collect only those contributions that [an employer] is contractually obligated to pay.” Greater St. Louis Constr. Laborers Welfare Fund v. RoadSafe Traffic Sys., Inc., 4:20-CV-1201 PLC, (E.D. Mo. Dec. 8, 2021). The only evidence produced that RoadSafe withheld contributions was the audit performed. Defendant RoadSafe challenged the assumptions that were made during that audit, and the court ruled that they did so successfully. The court therefore granted summary judgment in favor of Defendant and denied summary judgment for the plaintiffs.

The Appeal:

The issue on appeal is whether the CBA between the parties obligates RoadSafe to make contributions to the Funds for all work or only specified types of work.

On appeal, the funds argued that the CBA unambiguously required contributions for all hours worked, and while discrete categories were listed in the CBA, the definitions section defined those categories in such a way to encompass all RoadSafe activities. The court disagreed, holding that "Where the words of a [CBA] are clear and unambiguous, its meaning is to be ascertained in accordance with its plainly expressed intent." M&G Polymers USA, LLC v. Tackett, 574 U.S. 427, 435 (2015). The Eighth Circuit ruled that by naming the categories of work which would require contributions to be made, the CBA unambiguously limited RoadSafe’s obligations to those categories of work.

The fund also argued on appeal that RoadSafe’s recordkeeping was too vague and violated ERISA’s standards. But in the Court’s view, RoadSafe presented sufficient evidence that all hours coded as “NON” were not covered by the collective bargaining agreement.

Finally, the fund attempted to raise a defense to summary judgment that the audit produced undisputed variances in the amount of contributions owed. However, this argument was not made below, and was therefore not properly preserved for appeal. Accordingly, the court upheld the grant of summary judgment in favor of Defendant RoadSafe in its entirety.